Lenovo CEO distributes 3/14th of his compensation to junior employees

Lenovo CEO Yang Yuanqing took $3,000,000 out of his bonus and shared it among 10,000 of the company's junior employees. From CNN:

Yang had earned $5.2 million in bonuses for the fiscal year ending in March. His total earnings, including salary, incentives and other benefits, amounted to $14 million, according to the company's annual report.

I'm not sure what a "junior" employee is -- if it's a Chinese factory assembly worker, then a $300 bonus would probably contribute a significant improvement in material conditions.

CEO gives part of his bonus to employees

• [Dave Jenkins]

  Depending on the skill level, a Chinese factory worker earns about US$10K – $20K per year.

  • [Antinous / Moderator]

    Chinese factory workers earn more than US minimum wage? Do you have a citation for that?

    • [travtastic]

      Well, here’s a slightly more reasonable one.

  • [penguinchris]

    Besides travtastic’s link which debunks that number (and as far as I’ve heard, Foxconn is among the highest-paying factory companies), I know someone (Chinese) who works an IT job in Shanghai who makes maybe $600 a month, and many people in IT make even less than that. $10-20K a year in China is solidly middle class and relatively few people make that, and certainly not factory workers.

• [ordinal]

  Only $11 million this year! What a personal sacrifice.

  • [Aleknevicus]

    What percentage of your income did you give to others this year?

    • [foobar]

      100% of my earnings over $1 million.

    • [travtastic]

       What a philanthropist! I bet he’s also nice enough to pay his taxes.

• [Reuben Kellen]

  The article suggests that:

  “The employees, such as receptionists, production-line workers and assistants, each received an average bonus of 2,000 yuan, which is $314, in the name of their CEO.”
  Thus Yang Yuanqing should not be first against the wall when the revolution comes.

  • [John Maple]

    Yang Yuanqing is a wise man, in any age he might live.

• [Just_Ok]

  I’m so junior, I’m not listed on their payroll. Where’s my money?

• [10xor01]

  Kudos to Mr. Yuanqing.  But I wonder if these same employees have any guaranteed incentive compensation that isn’t contingent on the generosity of the CEO.

  • [Satisfied Customer]

    We do.  Lenovo has a very competitive (and lucrative) bonus structure.

• [dekkerd]

  Good for them and good for him to do it.

• [smallteam]

  Red China, Green China

• [doug rogers]

  Any significance to the 3/14? 3.14? A piece of the pi?

  • [invictus]

    I also immediately jumped to that conclusion. Another possibility may be lucky numbers in Chinese culture, though neither 3 nor 14 (nor 3/14) seem to be among those.

  • [Ant]

     3.14159 26535 89793 23846 26433 83279 50288 41971 69399 37510 58209 74944 59230 78164 06286 20899 86280 34825 34211 70679 …

  • [doug rogers]

    …on 7/22?

• [bluest_one]

  It’s nice and all, but earning a decent wage shouldn’t be dependent on a CEO’s largesse.

  Pay your workers a decent salary!

  • [foobar]

    How much extra are you willing to pay for your laptop to fund that?

    • [bluest_one]

      Nothing. Just divert the funds permanently from the greedy management.

      • [foobar]

        We should have caps on the how much more a CEO can earn than their base level employees (including subcontractors), but even doing that would only bump up their increase to about a grand or so.

        • [bcsizemo]

          100% agree.  Something along the line of 25 times max.  So if your lowest employee earns 50k a year you could only earn a million.  I mean that seems reasonable to me.  And I think it really should include total compensation as well, so bonuses, stock options, ect.

          Maybe we could go to 50x max..maybe.

        • [danimagoo]

          Once upon a time, Ben & Jerry’s had something like this. They may still have it. (runs off to look it up)

          Ok, I found it. They used to pay the highest paid employee 7 times the entry level pay. That ended in 1995 when they got a new CEO. http://articles.latimes.com/1995-02-05/magazine/tm-28412_1_ben-cohen/2

  • [Satisfied Customer]

    I work for Lenovo.  We are generously compensated. 

• [Petzl]

  Communism!
  (In, before Fox Business News, Tea Party, other running-scared CEOs) 

  • [Boundegar]

     Not at all.  Right wingers love charity.  Every time some kid gets chemotherapy by selling lemonade, it makes it that much easier for them to ignore the hundreds of kids who didn’t get chemo at all – and died.  Every CEO who gives generous bonuses makes it that much easier to argue against the minimum wage, and devil take the hindmost.

    • [Petzl]

      Surprised no one brought up “Undercover Boss” which is basically a drawn-out reality version of Mr. Lenovo.  It always amazed me how the CEO-dude has a company of thousands, he gets to see at most 5-10 people in depth.  All the people he’s dealing with are generally very competent and motivated but often hurting due to company policies or problems outside of work. He swoops in incognito, solves all these people’s problems (some with raises, some with healthcare, some with $5k or 10k checks), and pronounces, “My company is sound. My people are content.”  CEO-dude, you have 995 more problems to solve.

      Another example would be when a governor sets some guy free who’s been on death row for 10 years, days or hours before the execution date.  Then says, unironically,  “The system worked.”

      • [penguinchris]

        Having never seen the show, I didn’t realize that’s what Undercover Boss was – showing the boss how shitty his or her company actually is. I thought it would be the boss catching employees jerking off on the burgers or something. If the boss’s idea of a solution is to help out a handful of employees and not make any other changes, though, that’s incredibly lame.

• [jeligula]

  Lenovo has 27,039 employees as of their last corporate census.  That leaves out 17,000.  My own company cut our wages by 4% at the start of 2012, but instituted a quarterly merit bonus that is working quite well for us.  Yeah, I know.  Cut the wages and then give them back in a bonus, so who wins?  Not us.  And since bonuses are taxed at a different rate…… fuck. If a line-working peon got this bonus, they would have found their wage for the month doubled.  But I strongly suspect that the ones that got the generosity bonus had their monthly take increase by about 25%.

  • [travtastic]

     How does a bonus get taxed differently? Don’t they just tack it onto your check?

    • [stuck411]

      Sadly. No. It’s around 20%, but my memory isn’t what it used to be. That’s why companies love giving stock as bonuses. Played right and the final amount you get is only charged as if it was capital gains with the smallest amount taxed at the higher rate.

    • [realityhater]

      Gift Tax @30%

  • [timquinn]

    The article linked above in comments says workers at this level pay no income tax.

  • [Satisfied Customer]

    All Lenovo employes get a bonus twice a year, dependent on business results.  And we got a raise the last two fiscal years.  Even when the economy tanked and our results didn’t meet our stated targets, we still got a small bonus.  I was floored.

• [metacalifragilistic]

  This is more or less how I remember business being done in China.  There are a lot of personal gift exchanges, and bosses tend to reach into their own pockets to hand out bonuses before the Chinese New Year.

  The flip side is that accounting can be difficult.  Many kinds of ‘bonuses’ essentially become a part of regular compensation packages.  Kickbacks (huikou rou) are source of supplementary income for purchasing agents, and what you pay for everything from hotel rooms to clothing doesn’t match up to listed prices.  Even surgeons and anesthesiologists expect some sort of monetary gift before you go into surgery.

  • [Ant]

     It’s not Chinese New Year too. Hmm!

  • [Satisfied Customer]

    FYI, I work for Lenovo.  We have a straight-up bonus plan that gets paid out 2X per year, around the world.  So the bonus structure is strictly monitored as we are a publically traded company. 

• [seokso]

  My dad tried to give his (far far smaller) executive bonus to his (far far smaller number of) workers under him and made the mistake of asking HR to redistribute it for him. They refused to let him because they said it would make the other executives look bad for not doing the same. He ended up doing it quietly under the table, which meant he had to cover the taxes. I felt very proud of him that day.

  • [realityhater]

    Your Father is a rare man one who sees beyond the greed and corporate bullshit and actually takes action !  KUDOS  to him !

• [Sigmund_Jung]

  Not trying to play down what he did (it is by all means a fantastic gesture), but does he get some tax breaks on the charity line or something?

  • [Satisfied Customer]

    He earnings are made in China, so we can’t compare their tax laws to our own.

• [Dennis Smith]

  They might not employ as many people as you think. The factories will often be subcontractors and in some cases referred to as employees, but when it comes to pay they are contractors and therefore not welcome to the pay packages the real staff (possibly only a few thousand real staff) get. It’s often done this way so that the big company can work around any laws over pay and condition’s and enforce rules that would otherwise be illegal. The pay is often much much lower than that of the real staff and the company employing the agency to contract out staff is able to say that they don’t want certain people working there without due process of proper dismissal process. That nice pay out might look good to the press on paper but in reality, it’s a bit of PR, paying a lot of money to a small number of people each – instead of a little extra money to a lot of people. 

  • [Satisfied Customer]

    Lenovo has contrators but many, many more full time employees.  I’m one of them.